Where We Stand on Climate Policy

In his June climate speech, President Obama promised to tackle one of the biggest items on environmental groups’ wish lists: regulating new and existing power plants. Here’s a look at what kind of impact new regulation could have, what barriers stand in the way of imposing those regulations, and what authority the administration has to regulate plants in the first place.

A quick history

In a landmark 2007 decision, the Supreme Court determined the Environmental Protection Agency (EPA) can use its authority under the Clean Air Act (CAA) to regulate greenhouse gases, so long as the agency finds that those gases pose a threat to public health and welfare. If the EPA decides the public is indeed at risk, that “endangerment finding” triggers an obligation to regulate first the “mobile sources” (i.e. cars) and then the “stationary sources” (power plants) of greenhouse gases.

The EPA didn’t do much with this newfound power during the Bush years, but in 2009, the agency found that greenhouse gases were a threat to the public, and came out with aggressive fuel efficiency standards for new cars a couple years later. By law, the EPA was then required to get moving on stationary sources. But that hasn’t really happened. The Obama administration was hoping to simply to use the threat of the EPA regulating power stations’ emissions of greenhouse gases to bring Congressional Republicans to the table for a climate bill with cap and trade. When the bill fizzled in 2010, it became clear that any action on climate would have to come from the executive branch. And that’s where we are now.

Just how important is regulating power plants?

Extremely important. Power plants currently account for about 40% of all U.S. CO2 emissions, churning out more than two billion metric tons a year. The vast majority of those emissions (around 80%) come from coal-fired power plants, which produce more than twice as much CO2 as a typical natural gas-powered plant and, due to an industry exemption back in 1970, are virtually unregulated. Two-thirds of the plants in the existing coal fleet are exempt from the CAA rules.

How difficult is it to regulate power plants?

Very. As Haley Sweetland Edwards explained in her excellent piece in the Monthly’s March/April issue, getting a significant rule through the bowels of the regulatory process can take years and years, during which time it’s often subject to industry assaults and lawsuits that can have the effect of either watering it down or killing it entirely.

For example, the EPA proposed a rule in March of 2012 that would limit new power plants (both coal and gas) to emitting 1000 pounds of CO2 per megawatt-hour – a virtually impossible feat for coal plants given current technology. A year later, the EPA backed down, in the face of industry pushback, and threats of legal challenges. (And those legal challenges are no joke. Last year, the conservative DC Circuit Court struck down an EPA rule designed to protect residents from pollution in neighboring states.)

Where do we stand now?

Concurrently with his June climate speech, the president issued a memorandum dictating a timeline for regulating new and existing plants. The newly-revised proposed rule for future plants is due next month, and a proposed rule for existing plants is due in June of 2014, with a finalized rule to come the following year. The challenge to meeting these quick turnaround times is devising rules that achieve substantial emissions reductions that have a chance of both making it through the rule-making gauntlet and surviving court challenges.

One widely-praised proposed solution from the National Resources Defense Council would set a CO2 standard for an entire fleet, as opposed to individual plants; this would allow utilities to combine a variety of greenhouse gas–reducing methods (efficiency upgrades, investment in renewables, etc.) to achieve an emissions reduction goal, as opposed to requiring the same standard for each individual power plant. There are some concerns that the EPA does not legally have the authority to do this, but it would provide a much more flexible system for achieving real greenhouse gas reductions.

While not the most attention-grabbing issue, the EPA’s power plant regulations are crucial in shaping both the future of the energy industry in this country and our ability to address climate change. It’s been a long, slow process, but the answer to whether or not the EPA will be able to flex its muscles with a meaningful new rule—the first step in the right direction—will come next month.

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